But, positive signs are emerging: buying is picking up at key support, and negative news may be priced in.
July’s direction hinges on a breakout from a critical price zone.
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finds itself locked in a price squeeze this week, hovering around the $60,000-$62,000 range. While attempts to push the price higher have been short-lived, sellers remain active, indicating a potential battle for control.
A glimmer of hope emerged after a grueling 18-day losing streak for Bitcoin. Buying activity finally picked up at the critical $60,000 support level, a zone that has held strong throughout the year. The past few days suggest a potential rise in buying pressure as July approaches.
However, June was a month filled with negative news for Bitcoin, most notably the massive sell-off by miners. Uncertainty surrounding the Fed’s policy path also weighed heavily on the market. These factors, coupled with miner sales, exacerbated the short-term negative effects of the recent halving event.
Bitcoin Sheds Weak Hands: A Positive Long-Term Sign
Looking on the bright side, the recent market shakeout could have a positive long-term impact. The exit of weak hands from the mining sector and a potential decrease in mining difficulty due to lower activity could reduce Bitcoin production costs, leading to a new market equilibrium. This translates to a weaker sell side as miner pressure subsides.
Other recent events contributing to the price drop include the Mt. Gox developments and the news of the US and German governments transferring Bitcoins to exchanges for potential sale.
Despite the recent negativity, a broader perspective reveals reasons for optimism regarding Bitcoin’s ability to hold the $60,000 line. Developments in the US, a crucial market for Bitcoin, offer some hope.
The upcoming US elections could lead to a pre-election market cool-down, potentially benefiting Bitcoin. Additionally, positive statements from presidential candidates regarding cryptocurrencies are a welcome sign. Finally, the US Supreme Court’s decision to limit the SEC’s enforcement powers is a positive development for the crypto market, as the SEC has been a source of significant pressure.
This week’s price action suggests Bitcoin has absorbed much of the negative pressure. The decline in spot Bitcoin ETF sales, which surged due to bearish sentiment, and the recent return of positive fund flows (although partial) have also helped Bitcoin maintain its ground above $60,000.
The coming days will be critical. Will the bulls regain control and push prices higher, or will the bears succeed in breaking through the $60,000 support zone?
Bitcoin on a Tightrope: Key Levels to Watch in July
As Bitcoin enters July, it has hit the lower boundary of the consolidation zone maintained since March, following a month-long downward momentum. The ongoing battle between buyers and sellers in this area will likely dictate Bitcoin’s next direction.
Technically, indicators present mixed signals, highlighting the market’s indecision. The short-term exponential moving averages on the daily chart are bearish, hinting at a negative crossover. However, recent buying activity around the $60,000 mark has pushed the Stochastic RSI out of the oversold zone, generating a positive signal.
In this uncertain environment, identifying short-term support and resistance levels becomes crucial. The $60,500 – $61,000 range must hold to prevent further declines. A sustained break below this zone could trigger a drop towards $53,600, aligning with the 0.618 Fibonacci retracement level from the last upward move.
On the upside, the 8-day EMA, currently acting as the upper limit of the price squeeze, stands at $62,300 and serves as the first resistance point. A break above this level would encourage buyers, with high-volume trades above $64,500-$65,500 needed to shift the trend upward. Such a move could propel Bitcoin back into positive territory, potentially targeting the $71,000 mark. A breakout above this level could see Bitcoin reaching a new peak around $80,000.
In summary, Bitcoin has entered a zone of heightened volatility. The trend will likely follow the direction of the breakout from the $60,500-$62,300 range, making it a critical area to watch in the short term.
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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.
